FX.co ★ GBP/USD

GBPUSD H4 Outlook Update The GBP/USD pair is advancing at the start of a fresh trading week, reversing part of Friday's sharp decline to reach its lowest level in more than a week. On the spot market side, however, there is no clear sign of upward momentum, with the currency trading below mid-1.3500s in the Asian session, leaving room for further gains. This week marks a short break from the release schedule, but the USD has some tailwind in its favor as the currency consolidates gains from Friday's move above the nearly two-week high, against the backdrop of month-end rebalancing. For its part, the GBP finds support from the fiscal-prudence message delivered by UK Chancellor John Healey, who highlighted it as the key priority for PM Andy Burnham's government in the lead-up to the Autumn Budget due on October 28. At the same time, market forecasts for the BoE’s next interest rate increase have been pushed back to 2027, from Q4 2026. On the contrary, Fed Chairman Kevin Warsh’s statement made on Friday helped raise hopes for a Fed rate hike in September. This, together with the threat of another flare-up in US-Iran tensions, is likely to limit losses for the safe-haven dollar and restrict any further declines in the GBP/USD currency pair. As for the latest news in connection with the Middle East problem, US troops have attacked two Iranian missile launchers on Larak Island in Iran. Iran responded by firing ballistic missiles from Tehran, Lorestan, Karaj, Khorramabad and Shiraz, and anti-ship cruise missiles from southern Iran toward the Strait of Hormuz. This means that the geopolitical risk premium will be taken into account again. This week’s main theme is the crucial US macro numbers that will be released at the beginning of the month in question. These include the US monthly employment numbers, famously known as Nonfarm Payrolls (NFP). However, based on the fundamentals, the easiest case is for the USD to beto be up.

The GBP/USD pair is consolidating within a rather tight technical range on the four-hour timeframe, with price trading between key Fibonacci retracement levels and resistance from the moving average. The setup implies a neutral outlook in the short run, since neither side has gained clear dominance yet. Right now, the 100-period SMA at 1.3559 serves as an immediate cap, preventing further attempts at advancing higher. Above it, the 23.6% Fibonacci retracement level at 1.3579 brings additional resistance and forms a densely packed area of supply. A breach above 1.3559 will strengthen the technical setup on the near-term chart, and a breakout beyond 1.3579 will serve as a clear indication that buying momentum is gathering pace. In this case, this price action suggests that the ongoing consolidation period might be coming to an end for the GBP/USD pair and could enable it to begin forming a better recovery setup. Rejection from the price zone between 1.3559 and 1.3579 will highlight sellers at higher levels and keep the pair locked in its prevailing range. In terms of downward support, the first relevant level is the 38.2% Fibonacci retracement at 1.3521. This is the first resistance level for buyers and will invite some dip-buying activity if the pair comes under pressure from current levels. A breakdown below the price level of 1.3521 will undermine overall neutrality and shift focus to the next significant retracement at 1.3474. A continuation of the downtrend would reveal the 61.8% Fibonacci retracement at 1.3427, followed by the 78.6% level at 1.3360. This is where more significance is attached to these Fibonacci retracement levels, in the case of an intensification of the selling trend. Technically speaking, GBP/USD remains neutral, trading between 1.3521 and 1.3579. A move above 1.3579 is positive for bulls, while one below 1.35